STADIUM FINANCING PROSPECTS NOW FAR LESS DAUNTING

Can a modern NFL stadium be built in San Diego without any of the tax hikes that local governments around America have imposed to make stadium and arena projects for pro teams pencil out? Can San Diego’s general fund go unscathed even as the city partners in the building of a successor to Qualcomm Stadium?

This possibility seems more realistic than at any time in years. The Chargers think so, too, and so do some high-powered city insiders and real-estate players.

What’s driving this fresh optimism? The rebounding real-estate market, the increase in investors looking for ambitious development projects, and the seeming receptiveness in state government to passing laws that expedite job-creating mega projects.

Two years ago, the owners of the U-T presented their vision of building a $1.5 billion sports-entertainment district with a stadium, arena and convention center at the 10th Avenue Marine Terminal in downtown San Diego. In the analysis of how a stadium project could be financed, there was one powerful anchor. It was the $400 million — $200 million apiece — expected to come from the Spanos family (owners of the Chargers) and the National Football League, with the NFL’s assistance in the form of a loan toward construction.

Now, however, it seems increasingly plausible to think that there is a second powerful anchor for project funding to build on the contributions from the team and the league. It’s the money that could be generated from the sale and development of the city-owned Valley View Casino Center sports arena in the Midway District, a 67-acre site leased through 2017, and the city-owned 161-acre Qualcomm Stadium site in Mission Valley.

This, of course, would represent a significant contribution of public funds toward the project. But if taxpayers understood that the result would be both a world-class stadium and two privately revitalized, job-creating centers of commerce, this approach would be far less likely to trigger broad public opposition than tax hikes or subsidies from the general fund.

In late 2011, research and interviews suggested the Midway site might generate $50 million and the Qualcomm site $200 million.

But those were different times for California. The weakness of the state’s economic rebound spurred fears of a “double-dip” recession.

Now those fears have eased. It appears that both estimates of what the city sites might bring in today are low — and that the Midway parcel might have become as valuable as Qualcomm.

A key new player in the stadium debate is Colony Capital, a privately held Santa Monica-based global real-estate investment firm that has rapidly expanded since its 1991 founding through a strategy of identifying undervalued assets, acquiring them and realizing their potential. Colony Capital has been working with the Chargers since last summer.

“When we first met with Colony, (the sports arena) was the site they talked about. That was the site that interested them more than anything else,” Mark Fabiani, the team’s special counsel for stadium issues, said in an interview. “It’s completely flat ... a prime piece of land and a prime location.”

West of Interstate 5 and south of Interstate 8, and near Mission Bay, Ocean Beach and Mission Beach, the sports arena site could be perfectly suited for a mini version of the successful Liberty Station multiuse project on a former Navy base one mile to the south in Point Loma.

“The sports arena site could be extraordinarily valuable,” one veteran local developer and political insider told me. “Colony Capital knows what it’s doing.”

A multiuse project would generate considerable revenue for the city.

Meanwhile, the Qualcomm site in Mission Valley is once again as attractive for potential development as it was in 2004, when the Chargers proposed building a stadium there while paying for the project by developing the area around the stadium with residences, retail stores and more. Such development also would help generate tax revenue for the city.

The Qualcomm scenario now has other attractive dimensions: the possibilities that part of the site might be used for new student dormitories and faculty housing for expansion-minded San Diego State University, just four miles to the east, and that a park could be built on the San Diego River on the parcel’s southern edge.

“There aren’t many parcels (like these two) anywhere in a growing city in America,” said Fabiani.

How might this all come together?

In recent years, the Legislature has passed and Gov. Jerry Brown has signed bills expediting regulatory approvals for two potential football stadium projects in Los Angeles County. Because of the similar circumstances — including the prospect of strong union support — the Chargers are optimistic about the prospects for a similar San Diego bill clearing the way for development at the Qualcomm and sports arena sites and at whatever site is ultimately selected for the stadium. The measure might be even more attractive to state lawmakers if it also included capital improvements for San Diego State housing at Qualcomm.

Such legislation is a must-have to realize the value of the sites. Once enacted, the Chargers and the city could be on their way to having $800 million or more available for the stadium project. Depending on the site and the cost of construction and related infrastructure, that could be enough to fund a stand-alone stadium project. The East Village stadium plan touted by former Mayor Jerry Sanders had an $800 million price tag.

Beyond the funds from the Chargers, the NFL and the sale of the Qualcomm and Midway city property, there are other possible sources of money. The list includes:

• The $520 million that’s now planned to be spent for the Convention Center expansion, coming from increased hotel taxes and funding from the city and the Unified Port District. The project faces sweeping legal challenges. The lack of anything resembling an actual construction blueprint or adequate environmental and traffic-impact reviews has not just project critics but city insiders down on the chances the expansion will come to pass. If it fails, the possibility of winning hoteliers’ approval to shift that funding and integrating the expansion with a stadium project is far more likely.

• Tens of millions of dollars from the sale of naming rights to the new stadium. Previously, the Chargers indicated their intention to get all the money from these rights, as many NFL franchises do. But Fabiani now says the team would be open to negotiating a split of the rights, which have been $10 million or more per year for some NFL stadiums.

That might be because unlike the last time the city sold naming rights for the Chargers stadium — in 1997, when Qualcomm paid $18 million for the facility to be named Qualcomm Stadium for 20 years — there could be much more money to divvy up. Kia, the giant Korean multinational company, has worked with Capital Colony on major projects. Fabiani wouldn’t comment, but one downtown business consultant said the team expects a bidding war between Qualcomm and Kia for naming rights for a new stadium.

• Millions of dollars from naming rights to the convention center in an integrated stadium-convention center project; a revised downtown signage ordinance to allow electronic billboards; and a fee of 3 percent on team memorabilia and other goods purchased at the new stadium.

• Bonds pegged to streams of future revenue. The usual rule of thumb is that $1 million in annual revenue can service about $10.5 million in bonds. That could yield more than $60 million a year from a $10 per-seat, per-game levy on tickets to Chargers games.

• Construction of a major hotel near the stadium that could generate many millions each year from the city’s hotel-room tax.

Of all the possibilities that have been discussed by city and team officials, the one that comes closest to crossing what Fabiani calls the “bright line” between what voters will accept and what they’ll reject is funding bonds using the $10 million to $15 million a year the city pays to maintain Qualcomm Stadium. After existing stadium bonds were paid off or refinanced, that might generate $90 million or more.

But if the Chargers and Colony Capital are right about just how much the sale of the city’s Qualcomm and Midway parcels might yield, a stadium-financing plan might not have to go this route.

With the convention center funding available as part of a comprehensive larger project, more than $1.5 billion could be available from the various sources cited above. Without it, $1 billion appears within reach for a smaller project.

Since late 2011, the U-T editorial board has discussed stadium options with dozens of individuals in and out of government. These talks have often focused on the many obstacles to actually building a stadium and to partly funding it with the sale of city assets.

The list usually includes infrastructure headaches, starting with parking and freeway access; the potentially heavy cost of environmental cleanups both downtown and at Qualcomm; the likelihood of anti-stadium litigation; and the extent of anti-growth and not-in-my-backyard sentiment in city neighborhoods potentially buffeted by a grand public-private project.

Yet just about everyone agrees that by far the biggest obstacle has been the assumption that a stadium just couldn’t be financed without higher taxes and/or subsidies from city funds — and that San Diego voters would never accept such a gift of public funds to the wealthy Spanos family.

But if the taxpayers’ skin in the game is solely the sale of underutilized city land that could be put to far better use, then suddenly that obstacle seems far less daunting.

At that point, the primary obstacle to getting the stadium built could be the sheer volume of hard work we’ll need from elected officials, the Chargers and community leaders to come up with a smart, multifaceted plan that the public will accept.

It may not be boosterism or happy talk to look at the changed circumstances and believe San Diego is already at that point.